President Obama's State of the Union: Ten Skirted Issues

By Nomi Prins -Jan 24th 2012-

I confess; I expected to be bored out of my mind listening to President Obama’s campaign - I mean, State of the Union - I mean campaign, speech.....

.....It turned out that my pre-determination proved accurate. I wonder if the members of Congress felt the same sense of same déjà vu that I did, as they were bopping up and down and applauding.

Obama's speech was a compilation of highlights from his past ones. One part optimism, two parts repetition equals one total uninspiring. Maybe it’s so boring, because it matters so little at this point. Taking away popularity polls, our national threshold for belief in hope or change has been trampled, not just because of Obama or Romney, but of the whole political apparatus that thrives on deflection of reality and posturing. We don’t have the same energy to expend listening to politicians, the endless spin that renders fact obsolete, responsibility absent, and true accomplishment, unnecessary.

We saw Optimistic Obama in his first address to Congress in 2009: “While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before.”

We got Presumptuous Obama in 2010: “As we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.”

We watched Philosophical Obama in 2011: “We are the first nation to be founded for the sake of an idea -– the idea that each of us deserves the chance to shape our own destiny. That’s why centuries of pioneers and immigrants have risked everything to come here… The future is ours to win.”

Now, we had Campaigning on Fairness Obama. He returned to the roots of his pre-Presidential words, having accomplished little to attain the goal that his words implied. Here are ten things that President Obama skirted:

(((1))) The cost of healthcare insurance. Obama tried to play both sides, slapping a populace spin on an insurance industry gift. “That’s why our health care law relies on a reformed private market, not a Government program.” He claimed he won’t “go back” on things like health insurance companies being able to cancel policies. He didn’t say that insurance premiums have already risen 22% in the past two years. Republicans hate Obama’s ‘signature’ healthcare reform bill because it unconstitutionally forces people to purchase insurance. Democrats support the bill because Obama passed it. The reality is – by the time it takes effect in 2014, premium costs may have doubled. Frame it however you want, that means health insurance could cost twice as much when this bill takes effect as it did before it was passed. Meanwhile, there are more people without insurance (because they can’t afford it) even though insurance companies can’t cancel policies or deny insurance for pre-existing conditions. This bill merely offers insurance companies a wider pool of customers, with a few restrictions on how much they can pillage them.

(((2)))Student Loan Defaults. Obama claimed he wants to cap interest rates on student loans - which would be great, but can only work in this particularly low rate environment. He urged colleges to keep costs down – again, something that’s worked out really well when he’s mentioned it before. This year, student loan debt surpassed credit card debt, breaching the $1 trillion mark, at an average of more than $25,000 per student (and up 47% over a decade ago, not all under Obama, but a bi-administration problem is still a problem). Not surprisingly, student loan defaults rates have risen alongside this debt increase. Nearly 9% of loans... http://www.ed.gov/news/press-releases/default-rates-rise-federal-student-loans ...defaulted in 2010, of those that began repayment in 2009, vs. 7% that began in 2008.) Obama didn’t mention this growing problem.

(((3))) Youth unemployment. Obama took credit for the creation of 3 million jobs (I’m not going to debate that here). Regardless, youth unemployment is at its highest rate since 1948. The unemployment rate for those under age 25 is 18.1%, (31% for blacks) havin risen sharply since 2008. Do the math. High student loan debt + diminishing job prospects = bad ending. Work-study programs have to be intense to really alter that.

(((4))) Big banks. The largest firms continue to grow their asset bases and fee extrapolation strategies from their captive customer base (If you’re say, a JPM Chase customer, it costs you $5 to extract your own money from a Bank of America ATM – both banks get a cut). It was Obama that re-confirmed Fed Chairman Ben Bernanke for another fourteen years (and yes, a bi-partisan Congress agreed), and who still keeps Treasury Secretary, Tim Geithner around. Both men were gung-ho about the merger mania that dotted Wall Street in the fall of 2008 and making the ‘too-big-to-fail” banks bigger, as they now are.

(((5))) Small banks. President Obama didn’t address the smaller bank closings occurring because the big banks got disproportionate subsides;, 389 smaller banks (with $297 billion in assets) failed from 2009 to 2011. Like during the early years of the Great Depression, this means less choice for individuals, less loans for local businesses, and consolidation of influence and market share for the big banks – which comprise Obama’s largest bundling base.

Why? Because Obama’s program (that was supposed to help 5 million borrowers, and helped half a million) had to be approved by the banks. Banks don’t like citizen aid programs, even if they screwed them to begin with by fueling a $14 trillion toxic asset pyramid repackaging risky (for people), high interest-bearing (for them). Obama said, “The banks will repay a deficit of trust”? What?! When?! Where?!

(((7))) Recent regulator incompetence. Regulators looked the other way, Obama said, pre-crisis. But he mentioned nothing about the regulators giving a pass since; the SEC bestows banks settlements for fraudulent mortgage asset products, without extracting any admission of wrongdoing. He missed saying anything about the lack of related DOJ criminal indictments. The top five banks agreed to pay $1.149 billion to the SEC to settle subprime-mortgage related fraud charges, with no admission of guilt or criminal indictments. (The SEC settlement of $285 million with Citigroup was rejected by Judge Rakoff in November, 2011 and is being re-negotiated.) And Obama wants to create a Financial Crimes Unit? What’s the SEC supposed to be doing? or the DOJ? or the FBI?

(((8))) MF Global and customer money. On the same topic – the deficit of trust thing: Obama avoided any talk about his buddy, Jon Corzine or MF Global, the nation’s eight largest bankruptcy. He didn’t point out how diabolical it was to use and ‘lose’ customer funds that were supposed to have been kept separate from bad bets. He didn’t suggest having a solid separation between customer money and financial firm money - as in - don't have it at the same firm. He claimed to ‘we will not bailout you out again” and yet, we still are.

(((10))) Obama conveyed that we dodged a bullet with getting the banking system under control. He didn’t note the rising risk in the banking system: the largest four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since just last year, to $235 trillion JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. Goldman has 537 times as many (from 440 times last year) derivatives as assets... http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq211.pdf ...and it’s still considered a bank holding company (as per Bernanke) that gets federal backing.

In all, the President's speech was reminiscent of George Clooney’s in Ides of March. We’ve heard it all before, maybe with slightly different words: America lost 4 million jobs before I got here, and another 4 million before our policies went into effect, but in the last 12 months, we added 3 million job. We must reduce tax loopholes, and provide tax incentives to businesses that hire in America. We must reform taxes for the wealthy (though he signed an extension of Bush’s tax cuts.) We must train people for an apparent abundance of expert jobs. We need more clean energy initiatives. We created regulations (big sigh of relief he didn’t use the word ‘sweeping’) to avoid fraudulent financial practices. We will help homeowners. Wall Street must ‘make up a trust deficit.” Like Jamie Dimon cares.

In other words, Obama gave Wall Street a pass, while waxing populace. Don’t get me wrong. I expected nothing different. I will continue to expect nothing different, when he gets a second term, given the lame field of contenders all around.

If anything it illustrates the very same stubborn unwillingness we see prevalent throughout government, the refusal to actually address and tackle real issues, Our Issues, especially when its not in the interest of the perceived 'Greater Good' for someones particular political party-flavor of (more often than not) fundamentalist persuasion.

It wasn't a republiturd delivering the speech. Otherwise the critique found here would have had a pretty bluer veneer to it, that more may have found to be inoffensive.. pleasing even, perhaps.

It's not personal to me. Its about policy. And 'team' mentality is a poor substitute for substantive informative discussion. Misrepresentation is misrepresentation, whether its red or blue, and party fundamentalism isn't going to salvage anything or anyone.

Let there be clarity. Im not saying nor have I ever claimed Republiturds have been ANY better. Anyone who has read my posts here should be able to note I honestly try to give credit where credit is due... and critique where critique is due... to Both sides of the fence, to Both parties of misrepresentation

Im an equal opportunist. I just lenjoy exposing Lies, Fraud, Conflicts of Interest, etc wherever they appear, and for what they are. Have those characteristics I listed above now become qualities, undeserving of scrutiny? Should the people ignore these ..qualities.. if/when it seems to put their favorite team in an unfavorable light?

Would this same speech have been more reassuring if delivered by a republiturd? Of course not.. not if you can subtract and divide.. addition and multiplication are only half the equation.

Why do neither party apply both disciplines? Its always one or the other.

I found a nice Orwellian set of paragraphs smack in the middle of his speech.

And while Government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.

That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.

Let’s never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.

Top to Bottom: More Bailouts, More Handouts, More Copouts

While reading the first paragraph above I knew without a doubt a huge bailout proposal was coming up.

Sure enough, the very next paragraph contained a massive bailout proposal and in more ways than is readily apparent at first glance. For starters "responsible homeowners" don't need mortgage relief. Secondly, $300 a month is a lot of dough so I would like to see an accounting.

Finally, and most importantly, every loan that is refinanced will be paid off in full. Thus, any bank, hedge fund, mortgage provider, or GSE that is paid off on a nonperforming loan will be immediately made whole.

The White House plans to propose legislation that could allow a few million homeowners to reduce monthly mortgage payments by refinancing their current loans into new ones guaranteed by the Federal Housing Administration.

The program would broaden the availability of government-backed mortgages to include many borrowers whose loans are held by private companies and who have been unable to persuade those lenders to reduce their interest rates.

Existing federal programs focus mostly on borrowers whose loans are owned by the government. The new program will be directed at people whose mortgage debts exceed the value of their homes, according to a senior administration official who spoke on the condition of anonymity because the details have not yet been finalized.

The official estimated that the program could benefit two million to three million homeowners who have loans that are not guaranteed by the government, and that the program’s cost would not exceed $10 billion.

$10 Billion?! Really?

The proposal as outlined rates to take every "responsible" underwater mortgage held by banks, Fannie Mae, Freddie Mac, hedge funds, foreign banks, and pension plans, and transfer all of them to the FHA. The idea this will only cost $10 billion is absurd.

The "small fees on the largest financial institutions" are absolutely guaranteed to not cover the cost of this monstrous proposal. Indeed there is something in Obama's proposal for everyone except "responsible citizens".

"Let’s never forget: Millions of Americans who work hard and play by the rules every day" will be royally screwed by Obama's proposition in the form of higher taxes down the road.

(((2:20 into the video))) President Obama reiterated his commitment to cutting down on military spending and trimming the armed forces. But U.S. professor Paul Sheldon Foote says his pledge is at odds with Washington's foreign policy goals.

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